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Top executives see turnaround by year end
A majority of decision-makers in the UAE expect business conditions to
improve in the coming months, according to a survey conducted by Emirates Business.
This
newspaper polled 32 C-level executives, such as CEOs, COOs, CFOs, CIOs,
CTOs and business heads, of UAE corporates across key economic sectors
for the newspaper's CxO Survey.
The findings of the survey,
conducted in the past two weeks, reveal that a majority of top managers
remain hopeful of a turnaround in economic prospects by the end of the
year.
Majority of respondents (62.5 per cent) expect business
conditions in the UAE to improve in the coming months as opposed to
18.75 per cent who fear that the worse is yet to come. Around 18.75 per
cent believe conditions will remain the same.
"Our expectations
are that business conditions will improve in the coming months. After
the holy month of Ramadan, a number of corporate initiatives, which
have been delayed so far, will happen," said Jean-Marie Péan, Chairman
of private equity company Bain & Company Middle East.
"Many companies have been 'paralysed' since September 2008, and have cancelled investments, acquisitions and IPOs, he added.
"Now
that the worst (the systemic risk on the global financial system) seems (to be) behind us, all markets have regained some level of confidence,"
he said.
"Throughout the GCC, the strongest companies in their
respective industries (both strategically and financially) will be in
an excellent situation to make strategic moves that will help them take
advantage of the recession to strengthen their positions," he pointed
out.
Steve Austin McIntire, Managing Director, Capital Street
Partners said: "We have seen a marked improvement in interest expressed
for acquisitions of small to mid-sized businesses in the first four
months of the year, albeit from a very low point."
The
not-so-optimistic belief is that there will be no major change in
business conditions in the coming months and that the recovery is some
way away. "It will be a U-shaped recovery of the economy in the region.
This will take some time, perhaps another six to 12 months," said a
respondent.
Rating their level of business confidence as
compared to six months ago, a majority (50 per cent) of CxOs assigned a
7-8 weightage on a scale of 10. A little over 30 per cent (31.25 per
cent), on the other hand, opted for a mid level weightage (5) and under
20 per cent (18.75 per cent) said they would give a ranking of six to
measure their business confidence.
"The confidence level remains
largely unchanged from six months ago, at about 6/10. The global
economic environment continues to see uncertainty, especially with the
recent reversal of the 'green shoots' theory," said the COO of a
leading bank in the country.
"Currently confidence is still at
6/10," agreed Ashish Panjabi, Chief Operating Officer, Jacky's Group of
Companies. "There is still a lot of work to be done to bring things
back to where we see positive growth over last year. More work needs to
be done to bring in tourists and to make it more affordable for
visitors of all nationalities," he said.
"Currently things such
as visa costs are a hindrance to visitors coming from parts of the CIS,
Indian Subcontinent, Iran or Africa," said Jacky's COO.
"At the
same time, many countries in the Far East are now giving visas on
arrival or have waived visa requirements for many of these
nationalities and have thus been taking the UAE's 'share' of tourist
traffic," he added.
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